• Core FFO per Share: $1.01 in 2024, representing 11% growth from $0.91 in 2023.
• Same Store NOI Growth: 5.8% for Q4 2024 and 5.1% for the full year.
• Occupancy Rate: 94.1% at the end of 2024.
• Debt to EBITDAre Ratio: Improved from 9.2 times in Q4 2021 to 6.6 times in Q4 2024.
• Dividend Growth: Raised by over 9% in December, with a CAGR of 6.5% since 2021.
• Leasing Spreads: Renewal leasing spreads of 19% and new leasing spreads of 36.1% in Q4 2024.
• Cash Flow from Operations: $58.2 million in 2024.
• Dividends Paid: $24.9 million in 2024.
• Available Liquidity: $15 million in cash and $125 million available under the credit facility.

• Warning! GuruFocus has detected 8 Warning Signs with WSR.

Release Date: March 04, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Whitestone REIT (NYSE:WSR) achieved a compound annual growth rate of 5.5% for core FFO per share over the past three years, despite a challenging interest rate environment.
• The company reduced its leverage significantly, improving its debt to EBITDAre ratio from 9.2 times in Q4 2021 to 6.6 times in Q4 2024.
• Whitestone REIT (NYSE:WSR) reported strong same store NOI growth of 5.1% for 2024, driven by proactive tenant upgrades and strategic redevelopment.
• The company raised its dividend by over 9% in December, maintaining a 6.5% CAGR since 2021, with a payout ratio of approximately 50% of core FFO.
• Whitestone REIT (NYSE:WSR) has a strategic focus on high-value, high-return shop spaces, which provide flexibility and adaptability to changing market demands.

Negative Points

• Interest rate increases over the past three years have posed a significant challenge, causing a double-digit drag on earnings.
• The company's guidance does not include assumptions for non-same store NOI growth due to uncertainties in acquisition timing.
• Whitestone REIT (NYSE:WSR) faces competition in the acquisition space, with increased interest from other capital sources.
• The company anticipates continued costs related to the Pillarstone liquidation process, impacting G&A expenses.
• Lease termination fees, which contributed to 2024 earnings, are not guaranteed to occur at the same level in 2025, adding uncertainty to future earnings projections.

Q & A Highlights

Q: Can you provide details on the redevelopment opportunities and their timelines? A: Christine Mastandrea, Chief Operating Officer, explained that there are pad sites and larger centers that are well-placed but older, which are being actively repositioned. The redevelopment of larger centers is ongoing, with some having longer timelines. The focus is on aligning delivery timing with execution and cash flow.

Q: How does Whitestone plan to balance leverage reduction with increased external deployment efforts? A: David Holeman, Chief Executive Officer, stated that the core business's momentum and strong cash flow position the company well. They will focus on disciplined growth through redevelopment, leverage improvement, and potential acquisitions, ensuring all efforts contribute to earnings growth.

Q: What is the competitive environment for acquisitions, and how does it affect Whitestone's strategy? A: David Holeman noted increased interest in their market space but emphasized Whitestone's unique approach, focusing on smaller shop spaces and being agnostic about grocery anchors. Their deep market relationships and differentiated strategy position them well despite competition.

Q: What is the status of the Regis lease expiration and the mark-to-market opportunity? A: Christine Mastandrea highlighted the demand for boutique office spaces in mixed-use areas like Uptown Galleria, Houston. The location is attractive for tenants moving from downtown, and there is a positive dynamic for office space in this area.

Q: Can you provide an update on the Pillarstone liquidation process? A: David Holeman mentioned that the liquidation process is nearing completion, with all properties either sold, under contract, or with offers. The expected proceeds are well above the $45 million recorded on the balance sheet, and guidance will be updated as proceeds are received.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.